A file photo shows containers stacked in the Chattogram port. The pace of revenue collection may appear a big challenge for the new government in coming months in meeting the need of development expenditure as shortfall in collection by National Board of Revenue continues to widen every month, an expert and officials have said. — New Age photo
The pace of revenue collection may appear a big challenge for the new government in coming months in meeting the need of development expenditure as shortfall in collection by National Board of Revenue continues to widen every month, an expert and officials have said.
They said that the government might have to cut revenue collection target to a significant extent, which would also put pressure on implementation of the annual development programme.
According to provisional data of NBR, revenue collection fell short of the target by Tk 21,973 crore in the five months of the current fiscal year 2018-2019.
Tax officials managed to collect only Tk 79,724 crore in July-November, which is only 27 per cent of total target for the year, against the target of Tk 1,01706 crore for the period, the data released on Tuesday showed.
Revenue collection year on year grew by only 7.15 per cent in the period which is less than half of the growth NBR achieved at 16.52 per cent in the same period of last FY 2017-2018.
The government set revenue collection target at Tk 2,96,201 crore for the entire fiscal year.
NBR will have to collect Tk 2,16,468 crore or 73 per cent of total target in the remaining seven months of the year.
Former adviser to a caretaker government Mirza Azizul Islam told New Age that the deficit was much larger than that of the target while the growth rate was also very slow which would be a great challenge for the government.
He, however, said that the government would be able to balance the situation as the rate of ADP implementation would also remain slower like previous years.
The government might also increase its borrowing from banking sector to meet the deficit in revenue collection which will put additional pressure on already slowed down private sector credit growth, he added.
Aziz said that one of the reasons behind the widening shortfall in revenue collection might be that NBR might have relaxed exercising its authority for revenue mobilisation ahead of election.
He suggested revising existing tax structure and tax concession system, and dedicated efforts for expansion of tax net to increase revenue collection.
According to the data, deficit in VAT collection stood at the highest — Tk 9,321 crore — followed by customs duty by Tk 7,497 crore and income tax by Tk 5,155 crore.
Income tax, VAT and customs duty collection grew by 10.89 per cent, 5.55 per cent and 6.08 per cent respectively in the period compared with that in the same period of last fiscal year.
In July-November, income tax officials collected Tk 21,993 crore while VAT and customs duty collection stood at Tk 31,636 crore and Tk 26,104 crore respectively in the period.
According to NBR data, the shortfall was Tk 16,799 crore in July-October and Tk 11,430 crore in July-September period of the current fiscal year.
In July-November of last FY 2017-2018, NBR had collected Tk 74,414 crore in taxes with 16.52 per cent growth over the same period of the previous year.
NBR officials said that the overall economic activities remained slow, so many remained cautious in making new investment before election.
Tax officials also did not become harsh to taxpayers in the period while the collection target was also highly ambitious, they said.
NBR also offered huge tax exemption to different sectors including LNG import and apparel sector in the budget, they added.
A senior NBR official said that NBR was now boosting its efforts to expedite revenue mobilisation as it was expected that overall economic activities would get new pace under the new government.
In last week of December, NBR chairman Md Mosharraf Hossain Bhuiyan held meetings with three wings on strategies to boost revenue collection and gave several directions, he said.
He, however, said that the tax collection target might be cut significantly in budget revision to be hold in March or April as it would be impossible to recover the deficit in the remaining months.
Source: New Age.